640 F.3d 1377 (Fed. Cir. 2011), 2010-1394, Allergan, Inc. v. Athena Cosmetics, Inc.

Docket Nº:2010-1394.
Citation:640 F.3d 1377
Opinion Judge:GAJARSA, Circuit Judge.
Party Name:ALLERGAN, INC., Plaintiff-Appellant, v. ATHENA COSMETICS, INC., Pharma Tech International, Inc., and Northwest Cosmetic Laboratories, Inc., Defendants-Appellees, and Murray A. Johnstone, M.D. and Duke University, Plaintiffs, and Cosmetic Alchemy, LLC, Defendant-Appellee, and Nutra-Luxe M.D., Defendant, and Stella International, LLC, Product Innovat
Attorney:Mark A. Perry, Gibson, Dunn & Crutcher, LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief were Jeffrey T. Thomas and Blaine H. Evanson, Gibson, Dunn, & Crutcher, LLP, of Irvine, CA. Stephen Benson, Katten Muchin Rosenman, LLP, of Chicago, IL, argued for defendants-appe...
Judge Panel:Before NEWMAN, GAJARSA, and PROST, Circuit Judges.
Case Date:May 24, 2011
Court:United States Courts of Appeals, Court of Appeals for the Federal Circuit
 
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Page 1377

640 F.3d 1377 (Fed. Cir. 2011)

ALLERGAN, INC., Plaintiff-Appellant,

and

Murray A. Johnstone, M.D. and Duke University, Plaintiffs,

v.

ATHENA COSMETICS, INC., Pharma Tech International, Inc., and Northwest Cosmetic Laboratories, Inc., Defendants-Appellees,

and

Cosmetic Alchemy, LLC, Defendant-Appellee,

and

Nutra-Luxe M.D., Defendant,

and

Stella International, LLC, Product Innovations, LLC, and Metics, LLC, Movants-Appellees,

and

Peter Thomas Roth, Inc. and Peter Thomas Roth Labs LLC, Defendants-Appellees,

and

Lifetech Resources, LLC and Rocasuba, Inc., Defendants-Appellees,

and

Global MDRX, Cosmetic Technologies, Inc., DMI, La Canada Ventures Inc., and Susan F. Lin, M.D., Defendants.

No. 2010-1394.

United States Court of Appeals, Federal Circuit.

May 24, 2011

Page 1378

Mark A. Perry, Gibson, Dunn & Crutcher, LLP, of Washington, DC, argued for plaintiff-appellant. With him on the brief were Jeffrey T. Thomas and Blaine H. Evanson, Gibson, Dunn, & Crutcher, LLP, of Irvine, CA.

Stephen Benson, Katten Muchin Rosenman, LLP, of Chicago, IL, argued for defendants-appellees Athena Cosmetics, Inc., et al. With him on the brief was Robert B. Breisblatt.

Jeffrey L. Weiss, Weiss & Moy, P.C., of Scottsdale, AZ, argued for defendants-appellees Cosmetic Alchemy, LLC and Movants-appellees Stella International, LLC, et al.

Martin C. Washton, Towle Denison Smith & Maniscalco, LLP, of Los Angeles, CA, argued for defendants-appellees Lifetech Resources, LLC, et al. With him on the brief was Amanda R. Washton.

Before NEWMAN, GAJARSA, and PROST, Circuit Judges.

GAJARSA, Circuit Judge.

This case arises from the district court's dismissal of Allergan, Inc.'s (" Allergan" ) claim for relief under California Business & Professions Code (" UCL" ) § 17200 et seq. — the unfair competition provisions— for lack of standing. The issue before the court is whether a party must allege an injury compensable by restitution to have standing under the UCL. The California Supreme Court makes clear in two recent decisions, Kwikset Corp. v. Superior Court of Orange County, 51 Cal.4th 310, 120 Cal.Rptr.3d 741, 246 P.3d 877 (2011) and Clayworth v. Pfizer, Inc., 49 Cal.4th 758, 111 Cal.Rptr.3d 666, 233 P.3d 1066 (2010), that UCL § 17204, as amended by Proposition 64, requires that a party need only allege an injury in fact that was caused by defendant's unfair competition. We therefore reverse and remand.

BACKGROUND

Allergan manufactures and sells Latisse®, a FDA-approved product that uses PGF, a prostaglandin compound, to treat inadequate eyelash growth. Allergan's First Am. Compl. 5. In fact, Allergan is the only authorized manufacturer of a prostaglandin product for the stimulation of hair growth. Id. The only other FDA-approved uses for prostaglandin compounds are to treat glaucoma and ocular hypertension. Id. The numerous defendants 1 in

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this case allegedly manufacture, market, and/or sell products containing PGF for hair and/or eyelash growth. Id. at 6-9.

Allergan filed an action in the United States District Court for the Central District of California, alleging that the defendants infringed or induced infringement of U.S. Patent Nos. 6,262,105, 7,351,404, and 7,388,029 under 35 U.S.C. § 271. Allergan also alleged that the defendants violated UCL § 17200 et seq. Section 17200 defines " unfair competition" as " any unlawful, unfair or fraudulent business act or practice...." Allergan alleged that the defendants violated the UCL by " unlawfully marketing, selling, and distributing hair and/or eyelash growth products without a prescription, without an approved new drug application [from] the FDA or the California Department of Health Services, and in violation of state and federal misbranding laws." Allergan's First Am. Compl. 11. It also alleged that the use of defendants' products " can result in significant adverse reactions and substantial harm" and that the products are not " recognized ... as safe and effective." Id. at 12-13. Furthermore, Allergan claimed that the " [d]efendants' unfair competition has resulted in and continues to result in serious and irreparable injury to Allergan, including but not limited to lost sales, revenue, market share, and asset value." Id. at 14.

A party found to have violated the UCL may be enjoined or required to " restore to a person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition." UCL § 17203. Thus, the remedies available to injured parties are an injunction and restitution, id., both of which Allergan requested, Allergan's First Am. Compl. 15.

Defendants Athena Cosmetics, Inc., Pharma Tech International, Inc., and Northwest Cosmetic Laboratories, LLC (collectively, " Athena" ) moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c), claiming that Allergan lacked standing to pursue its claim that Athena violated UCL § 17200 et seq. Allergan, Inc. v. Athena Cosmetics, Inc., Case Nos. 07-CV-1316 and 09-CV-328, slip op. at 1 (Mar. 3, 2010) (" Dismissal Opinion " ). According to Athena, because Allergan did not allege an injury that was compensable by restitution, it failed to meet the standing requirements of UCL § 17204. Id. at 3.

Section 17204 states that " actions for relief pursuant to this chapter shall be prosecuted ... by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition." At the time the Rule 12(c) motion was filed and decided, California state courts had generally held that " [b]ecause remedies for individuals under the [unfair competition...

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